Bull Trend Analysis Feed http://www.bull-trend.com Bull-trend.com was designed for traders like yourself. We strive to be your number-one resource for timely, accurate and useful forex, futures and commodity quotes, charts, technical opinion, trading analysis and other market commentary. CFM 263 94 http://www.bull-trend.com http://www.bull-trend.com/bk2/img/flogo.jpg USD/HUF remains well offered http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 18:02:19 -0500 USD/HUF is capturing attention with its sustained price move and soaring volatility.<br /><br />The search for a low in today's trading is reflected in the 2-standard deviation bands expanding for several consecutive hours. Moreover, the near-term technical picture shows recent close prices printing below the 50 exponential moving average, a bearish condition that should it persist, would help maintain prices below the SAR indicator. <br /><br />The parabolic SAR has yet to switch direction after two sessions of downward price movement. By doing so means shorts are taking profit. Risks exist the volatility and down drift extend to higher time frames. USD/CAD short-term technicals: neutral-bullish - Scotiabank http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 17:55:01 -0500 Analysts at Scotiabank offered a snap-shot technical analyses on USD/CAD. Key Quotes: "Short-term technicals: neutral-bullish. USD/CAD is quiet trading around the mid-point of its range from late January, consolidating below its 200 day MA near 1.3150. Momentum indicators are neutral, DMI’s are muted, the ADX is trendless, and short-term MA’s have flattened out. We note the sequence of higher lows from January 31, suggesting near-term support in the mid-1.30 area. Resistance is limited ahead of 1.32." Fed's Kaplan: Sooner rather than later means in the andquot;near futureandquot; http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 17:43:56 -0500 Dallas Fed's President Robert Kaplan is on the wires now, via Reuters, stating that hiking interest rates sooner rather than later would help U.S. central bank avoid falling behind the curve on inflation. Also, he clarified that "sooner rather than later" means "in the near future". EURUSD interbank: tracking the spread, a sell on rallies http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 17:41:59 -0500 EUR/USD has shown some bullish signs of life, popping higher to challenge the 200-hour smoothed-ma in recent trade at 1.0639 with a high of 1.0631. However, the euro is meeting a strong resistance line here initiated at the Feb highs of 1.0828 and the dollar is starting to consolidate the break below the DXY 101 handle and climbing higher. While the euro attracts safe haven and carry flows and finds a bid on status-quo EZ political news, the wide USD-supportive short-term rate spreads will remain a bearish factor for the euro's outlook.  The euro tracks the German 2y spread like clockwork and has done so from 1.1140 when the spread was narrower at 1.45 to current spot 1.0615 with the spread widening and on the approach to 2.10 - thus unless there is a fundamental change from the ECB or Fed, this correlation will continue to drag on the euro and possible opening further fading opportunities on rallies.  Bullish on the greenback - Scotiabank Meanwhile, opinion polls around the French elections will dominate the markets in relation to the euro from now and indeed the euro has caught a bid on the back of centrist Macron closing the gap on the far-right’s Le Pen in first round voting intentions in the French presidential election.  EUR/USD levels Analysts at Commerbank remain bearish on the euro: "We look for the rally to falter ahead of the 20 day ma at 1.0651 and the 1.0686 3 month downtrend. We continue to target recent lows at 1.0352/40. Intraday a move sub 1.0545 should trigger further weakness. The market will remain directly offered below short term downtrend at 1.0686. Above here lies 1.0820/29, which represents the 50% retracement and the recent February high." Guajardo: andquot;Mexico is the U.S. 2nd largest commodity and manufacturing buyerandquot; - Bloomberg http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 17:20:30 -0500 According to the latest wires, via Bloomberg, Mexico’s top trade negotiator doubled down on threats to break off talks to rework Nafta if the US decides to impose tariffs in their products. Key Highlights: •Trump has lambasted the accord -- which also includes Canada -- as unfair and responsible for a “massive” imbalance favoring Mexico. It last year shipped $294 billion worth of goods north while the U.S. sent $231 billion south. •Without Nafta, trade between Mexico and the U.S. would be ruled by World Trade Organization strictures limiting tariffs either country can impose on the other, with the average for Mexico at around 3 percent, according to the Mexico City-based political-risk advisory firm Empra. •According the Guajardo; The border-adjustment tax is something that’s squarely a domestic fiscal matter for the U.S. and in addition; complicated to implement. Meanwhile, the USD/MXN exotic bounces off lows - as of writing, trading at 19.83. However, bears seem in control targeting the 200-DMA. If prices open and close above 19.98 (high Feb.23) the bearish price action could be diluted and doors opened to target the 100-DMA near 20.29. Yen comes with mixed sentiment fundamentally - Scotiabank http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 17:00:50 -0500 Analysts at Scotiabank explained that fundamental releases have been limited for the Yen, with near-term risk centered on industrial production and retail sales figures ahead of Friday’s CPI. Key Quotes: "The 2Y U.S.-Japan yield spread remains elevated below the multi-year high from mid-February. Measures of sentiment are mixed with shorter time horizons pricing a modest premium for protection against JPY strength. Longer tenors capturing French election risk are pricing a greater premium, at levels last seen around the U.S. election from November. JPY’s risk profile leaves it vulnerable to swings in the broader market tone with knee-jerk, havendriven gains in periods of risk aversion." "Signals are neutral across both trend and momentum indicators, however the chart is suggestive of further downside with the formation of a descending triangle from the December 2016 high. There are no significant support levels ahead of the 200 day MA." GBP/USD: bulls eye key resistance through 1.2480/90 http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 16:53:20 -0500 Currently, GBP/USD is trading at 1.2466, up 0.09% on the day, having posted a daily high at 1.2477 and low at 1.2384. GBP/USD has recovered from below the 1.24 handle and early Asian lows as the greenback falls away in the US session today. From the US docket, Durable Goods Orders came in above estimates 1.8% in January while Core orders have unexpectedly contracted. Pending Home Sales were dropping 2.8% for January vs. a 0.8% gain consensus and the Dallas Fed Manufacturing Business Index climbed to 24.5.  Trump's speech to the joint session of Congress is the most important event this week - BBH UK: Willing to accept another Scottish referendum if it takes place after it leaves EU - BBH Elsewhere, we are focused on Trump & Brexit implications with the surfacing of the Scottish referendum proposals that knocked some wind out of sterling overnight. The UK Times report over the weekend explained that Nicola Sturgeon and Theresa May are heading for a showdown over who has the right to call another independence referendum and when it should be held. In respect of Trump's Budget today, this showed a $54 billion boost to defence. There were significant cuts seen in Foreign Aid and Federal Agencies. The dollar was hurt on more news that Trump’s first Budget will not address taxes or mandatory spending.  Fed's Kaplan: There is still jobs market slack GBP/USD levels  Although there has been some weakness in the pound, analysts at Commerzbank argued that prices will need to go sub 1.2250 in order to alleviate immediate upside pressure and trigger losses to the 1.1988/80 recent low. "Immediate support is the 1.2347 February low."  However, analysts at Scotiabank are bearish on a break below 1.2405, "Holding the range gives the GBP a neutral feel but broader risks are tilted to the downside, we think; a daily close under 1.2405 (40-day MA) may be enough to push the pound back towards the early Jan low around 1.1995/00." To the upside, 1.2480 and the 50/200 smoothed smas align guarding 21st Feb highs at 1.2507 and 24th Feb high at 1.2569.<br />   United States 6-Month Bill Auction remains at 0.67% http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 16:52:55 -0500 United States 3-Month Bill Auction dipped from previous 0.535%and#160;to 0.515% http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 16:52:55 -0500 Fed's Kaplan: There is still jobs market slack http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 16:25:36 -0500 Dallas Fed's President Robert Kaplan is crossing the wires from a Q&A session, via Bloomberg, highlighting that US GDP growth was "pretty choppy" last year. More headlines (via Bloomberg): Key to US economy is the consumer We're closer to balance on oil supply/demand Confident US GDP growth will exceed 2% in 2017 We're forecasting 2.25% growth Participation rate likely to fall in the decade, US needs much more workforce development and education USD/MXN down 0.06% on the day; price trapped between 100-DMA and 200-DMA http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 16:23:22 -0500 Currently, USD/MXN is trading at 19.82, down marginally -0.06% or (111)-pips on the day, having posted a daily high at 19.90 and low at 19.73. The American dollar vs. Mexican peso experienced a challenging environment last week as Banxico's initiatives build up momentum to favor the peso. However, in the next day's news releases, Trump's stimulus and Fed's Yellen could easily test and reverse those accumulated losses; as of writing near to (2.62%) in the last 6-trading sessions. According to the latest wires, via Bloomberg, "Mexico's economy minister Ildefonso Guajardo warned that his country will break off negotiations on the North American Free Trade Agreement (NAFTA) if the United States were to propose tariffs on products from Mexico." USD/MXN could extend downward correction towards 19.56 – Natixis Historical data available for traders and investors indicates during the last 9-weeks that USD/MXN, a commodity-linked and exotic currency, had the best trading day at +1.83% (Jan.10) or 3983-pips, and the worst at -2.22% (Jan.25) or (4684)-pips. Furthermore, the US 10yr treasury yields have traded from 2.34% to 2.31%, up +1.00% on the day at 2.33% or +0.0231. Technical levels to watch In terms of technical levels, upside barriers are aligned at 20.28 (100-DMA), then at 20.86 (50-DMA) and above that at 21.37 (high Jan.27). While supports are aligned at 19.73 (low Feb.27), later at 19.47 (200-DMA) and below that at 18.93 (low Nov.4). On the other hand, Stochastic Oscillator (5,3,3) seems to slightly turn south, but 'extreme attention' over US Treasuries to avoid a market trap. Therefore, there is evidence to expect more Mexican Peso gains in the near term. On the medium-term view, if 22.03 (high Jan.15) is in fact, the top during the first semester in 2017, then traders and investors would have allocated risk around the following support levels: 19.46 (low Sep.18), then at 19.19 (short-term 50% Fib) and finally below that at 18.51 (short-term 38.2% Fib). On the other hand, upside barriers are aligned at 19.87 (short-term 61.8% Fib), later at 20.54 (high Feb.12) and above that at 20.92 (high Jan.29). The Fed is the only thing that might upstage Trump The misplaced animosity toward importsand#160;- BBH http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 16:08:58 -0500 Analysts at Brown Brothers Harriman explained that the mercantilist inclination by the Trump Administration makes it seem as if exports are good and create jobs and imports are bad and cost jobs - This is simply not true.   Key Quotes: "This assessment is not based on newfangled thinking about trade. Rather Adam Smith argued against such a view in his 1776 bestseller, An Inquiry into the Nature and Causes of the Wealth of Nations.   <br /> Signals by top officials suggest that the White House still has reservations about the border adjustment, a central piece of the bill sponsored by the House Republicans.  If the tax changes create a higher deficit in a decade, 60 votes in the Senate are needed not a simple majority.   The Republicans hold 52 seats in the Senate, and already a couple of Republican Senators have indicated they cannot support the measure.   The border adjustment was to raise more than $1 trillion, which would have funded part of the tax cuts that the White House seeks. Without, another source of revenue will have to be sought or the tax cuts scaled back considerably.     Treasury Secretary Mnuchin has also hinted that its assessment of the impact of the tax changes will likely be more optimistic than others because of the dynamic calculation, i.e.,., that the tax cuts will increase activity and boost revenue.   One fall-back option that is being considered is a "reciprocal tax" to ensure imports are treated the same way as US exports. The details are not clear, and if not done properly, would likely run contrary to the WTO.   However, according to a report in the Financial Times, Trump Administration officials are looking for alternatives to the dispute resolution mechanism at the WTO.   "Their goal, people briefed on the request told the Financial Times, is to find ways that the new administration could circumvent the WTO's dispute system." Whether it is through the border adjustment, a reciprocal tax, or other mechanisms, at the heart of the drive is to reduce the US trade deficit.  This sounds like a noble goal, but it is considerably more complicated that exports are good and imports are bad. Anne Krueger, former chief economist and Deputy Managing Director at the IMF, now a professor at John Hopkins and Stanford, has an interesting note on Project Syndicate.   Krueger argues that imports have been maligned. Imports create jobs. She begins off with the obvious; jobs related to shipping, like longshoremen unloading cargo, pilots, truckers and their crews. There are wholesale and retail workers stocking and selling the imported goods.     Also, she reminds us that half cost of a retail consumer good is incurred locally for storing, shipping and marketing. Consider too that the demand for foreign cars, for example, would be considerably weaker if the parts and mechanics were not accessible.  Imports also can provide cheaper inputs than available locally. That enables US companies to compete more vigorously with foreign firms in third markets, as well as to maintain market share domestically. Foreign firms that export to the US earns an income that can be used to purchase goods from US firms. Krueger argues that exports generated by imports create better jobs overall.   Krueger warns that limiting US imports would likely spur many trading partners to curb their imports.   Export earnings, she argues, finance imports for most of the world. If US imports fall so will US exports. Export sector jobs would likely fall, alongside jobs created by imports.   The same arguments that seek to correct the demonization of imports also apply to foreign direct investment (FDI), which creates the international supply chains that at least some in the Trump Administration want to unwind.  Krueger argues that FDI allows US firms to secure inputs at lower costs while engaging in higher-valued added tasks like R&D. Direct investment may help save jobs in the US if the choice is between unskilled offshoring work and going out of business.   Trade is unjustly blamed for the loss of manufacturing jobs in the US.  Manufacturing employment, though not output, peaked in the late 1970s before free-trade agreements and China's entry into the WTO (late 2001). We have noted that some of this are definitional, and a result of manufacturing companies outsourcing some services.  However, if there is an agreement among economists, it is that the decline in manufacturing employment (not just in the US) is a result of improved productivity and the use of machines, computers, and robots.  Many emerging market economies, including China, have lost manufacturing jobs."  Bullish on the greenback - Scotiabank http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 16:03:18 -0500 Analysts at Scotiabank explained that they remain generally bullish on the USD. Key Quotes: "A third week of net gains in terms of the DXY index was reregistered last week after the early Feb rebound in the broader dollar performance, suggesting that investors are also warming to the USD again after long positions were liquidated through the turn of the year." AUD/USD: bulls bouncing back towards psychological 0.77 handle http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 15:57:23 -0500 Currently, AUD/USD is trading at 0.7688, up 0.13% on the day, having posted a daily high at 0.7709 and low at 0.7663. US Dollar tumbles to lows near 100.80 AUD/USD started off the week on a positive on the back of 10year US Treasury yields that had fallen their lowest levels since November on Friday, flirting with 2.3% as noted by analysts at Brown Brothers Harriman, who explained the speculation in markets that it will take time for easier fiscal policy to arrive in the US. On top of that, the Aussie was supported after Dec qtr profits saw a blockbuster jump of +20%/qtr. This can be explained by the strength in mining from strong commodity prices and bumps up nominal GDP.  "Inventories at +0.3% was slightly softer than expected but does not affect our GDP forecast (+0.6%/qtr ahead of tomorrow’s trade and govt sector updates). White House: Trump's first budget will not address taxes or mandatory spending A busy week ahead for AUD/USD For the week ahead, we have Aussie Dec current account deficit, net exports, Dec Govt spending, GDP, Feb PMI, Feb House prices, the January trade balance and Jan building approvals. We will also have Chinese Feb Manufacturing PMI, Feb non-manufacturing PMI, Feb Caixin manufacturing PMI and Feb Caixin non- manufacturing PMI. AUD/USD levels With a low at the 20 dma at 0.7663, AUD/USD struggled on the 0.77 handle and above the 50 sma on the 1hr sticks located at 0.7693. "Below the 20-day-ma we remain unable to rule out a 0.7595/15 retracement ahead of another upside attempt," explained analysts at Commerzbank. The 0.7778/.7850 2016 highs and the 38.2% retracement levels offer further resistance ahead.  Above 0.7850 would target the 200 month ma at 0.7930.  <br />   US Dollar tumbles to lows near 100.80 http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 15:41:32 -0500 The US Dollar Index – which gauges the buck vs. its main rivals – is accelerating the decline today to fresh lows in the 100.85/80 band. US Dollar weaker ahead of Trump The index met further downside pressure on Monday, quickly breaking below the key support at 101.00 the figure following mixed results from the US docket and a generalized cautious tone ahead of Trump’s speech on Tuesday. From the US docket, Durable Goods Orders have expanded above estimates 1.8% in January, although Core orders have unexpectedly contracted. Further data saw Pending Home Sales dropping 2.8% inter-month in January vs. a 0.8% gain initially forecasted and the Dallas Fed Manufacturing Business Index up to 24.5 for the current month. The selling mood around the buck has intensified as details from Trump’s Budget showed a $54 billion boost to defence, while significant cuts are seen in Foreign Aid and Federal Agencies. Further news said Trump’s first Budget will not address taxes or mandatory spending. News agency Reuters said Tuesday’s speech to have a big statement on infrastructure. Closing the docket, Dallas Fed R.Kaplan (voter, hawkish) is due to speak. On the positioning front, speculators continued to scale back its net longs positions during the week ended on February 21, retreating to the lowest level since late October as showed by the latest CFTC report. US Dollar relevant levels The index is retreating 0.18% at 100.94 and a break below 100.86 (low Feb.23) would open the door to 100.64 (low Feb.24) and then 100.60 (20-day sma). On the other hand, the next up barrier aligns at 101.35 (55-day sma) followed by 101.75 (high Feb.15) and finally 101.95 (23.6% Fibo of the November-January up move). Iran Oil Min: OPEC's level of compliance with production cut deal in January was andquot;acceptableandquot; http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 15:40:42 -0500 According to Mehr News, quoted by Reuters, Iran's Oil Minister Bijan Zangeneh said OPEC's level of compliance with production cut deal in January was "acceptable". United States Dallas Fed Manufacturing Business Index up to 24.5 in February from previous 22.1 http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 15:33:10 -0500 White House: Trump's first budget will not address taxes or mandatory spending http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 15:27:32 -0500 According to a White House Budget's official, U.S. President Donald Trump will release budget that will increase defense spending by $54 billion. Key headlines (via Reuters): Trump budget will also cut non-defense spending by $54 billion to offset There will be a "large reduction foreign aid" in Trump budget Most Federal agencies will see reductions in funding Trump will let Pentagon decide how to spend a $54 billion increase in funding United States Pending Home Sales (YoY) up to 0.4% in January from previous 0.3% http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 15:02:14 -0500 United States Pending Home Sales (MoM) registered at -2.8%, below expectations (0.8%) in January http://www.bull-trend.com/ Currencies http://www.bull-trend.com/ Mon, 27 Feb 2017 15:01:43 -0500